[amazon-myfavorites]de928fa3-231a-4f61-8735-e51686288789[/amazon-myfavorites]When I lived in Rochester, New York, my mother and I developed a weekly ritual. At least once a week, I would call her: right after ER, on Thursday nights. It was rare that we’d talk less than an hour. When the people you love are far away, long phone calls are important, but they can be expensive.

The best way to keep costs down, I found, was to work for a telephone company. It’s hard to beat “free” as a long-distance rate! It sure gets rid of those pesky sales calls:

“Sir, I’m sure we at XYZ Telecom can beat any deal you may have.”

“I get free service, I work for your competitor.”

“Uh? *click*”

That’s not an option for most people.

Many people pay too much for long distance calls simply because they’ve never asked for a better rate. If you’ve had your phone line for a long time, and you haven’t shopped around, there’s a chance you’re still getting a “standard plan” from AT&T or another large telephone company. Rates on those plans are far above average—they’re aimed at soaking people who, for whatever reason, don’t call up and ask for something better.

Three kinds of service

There are three popular forms of long-distance service available today.

Most people use a Presubscribed Interexchange Carrier, or PIC. That’s the technical term for “just pick up the phone and dial one plus the number.” Your phone line has a PIC Code associated with the account, which tells the local phone company that when you dial long distance, it should send the call to a particular long-distance company (“interexchange carrier”).

You can use a different long-distance company for just one call by using a “dial-around” code. That’s a ten-digit code, starting with “101,” such as 10-10-220. These services are heavily advertised with low rates, but as I’ll discuss in a moment, you need to read the fine print carefully.

There are also pre-paid long-distance calling cards. These are available at many retail stores. They can offer quite a bargain, but there are two catches. First, you have to give money to the company up front, so if you don’t use the card much, your money will be tied up in their hands. Also, your card may “run out” in the middle of a call. Depending on the card, it may not be possible to “refill” the card without hanging up and calling customer service.

In this article, I’ll discuss PIC and dial-around plans.

Know your habits

To get the best rates, you first need to know how you use the telephone. Do you make only a few long distance calls, or are they frequent? Do you call just a few people, or many? Where are the people you call? Do you make short calls, or long ones? Do you make international calls? You can find this information by looking at your past bills and reviewing your calling habits.

Do the math

Now that you know how you make calls, you can closely examine the plans. This is where some “bargains” come up short.

Many of the “10-10” discount plans offer a “flat rate” like “just 99¢ for the first 20 minutes!” That;s a great rate if you talk for twenty minutes. If you get an answering machine, you wind up paying 99¢ for a one-minute call. If you aren’t a chatty person, or you call someone who’s rarely home, these plans aren’t for you.

Look for monthly fees or monthly minimums associated with the plan. One long-distance company I’ve used offers two plans: 3.9¢ per minute with a monthly minimum of $5.00, or 4.4¢ per minute with no minimum. Because I make many calls, the lower per-minute rate works better, because I always exceed the minimum. If I made only a few short calls, the higher per-minute rate might actually be cheaper.

Name brands for less

There are a great many long distance companies out there. Most people have only heard of the big three: AT&T, MCI (also known as Worldcom), and SPRINT. There are also other well-known brands that mainly sell to businesses, such as Qwest and Global Crossing.

You shouldn’t reject a good rate just because it comes from a company you’ve never heard of. Smaller long-distance companies often lease services from one of the big carriers. You’d be getting the same service but at a lower cost. The biggest difference is usually operator services: smaller companies may use automated systems, or outsourced operators located overseas. Most people rarely need to contact the long-distance operator, so that’s rarely an important issue when choosing a service.

The speed-bump: PICC Freeze

When you go to change your service, you may run into a speed-bump. Some shady companies have been known to change peoples’ long-distance service without authorization, causing them to run up large bills. This practice is known as “slamming.”

To prevent slamming, local phone companies like SBC offer a service called a “PICC Freeze.” When this is done to your phone line, the local phone company won’t let anyone change your PIC Code without getting permission directly from you. (Otherwise, they may accept various forms of “permission,” such as a rebate check with a note “By endorsing this check, payee agrees to switch their long distance service to Fly-By-Night Telecom.”)

If you have a PICC Freeze on your line—and you should—you may need to make several calls to get your long-distance service changed. You’ll need the PIC Code from your new long-distance company, and you’ll need to call the local phone company and tell them to change the PIC Code for your phone line. Your long-distance carrier will help you through this process.

Most local phone companies will charge a fee for a PIC Code change. Ask your long-distance company about this; many will give you a credit for the amount of the fee.

I see IP

Many long-distance companies now convert your calls to Internet Protocol (IP) data, because it’s more efficient to treat phone calls as just another kind of data on the Internet. This happens transparently—you’d never notice it.

Some companies are using the technology to bring very inexpensive service straight to your home. Companies like Cox Cable and Vonage offer “IP Telephony.” You need to have high-speed Internet, such as a cable modem or DSL, to use it. You’re provided with a small converter box that plugs into your home computer network. You can then plug a phone into it. Phone calls are placed directly over the Internet.

This is much cheaper than normal phone service. For example, Vonage offers service with all the extras—call waiting, voicemail, forwarding, transfer—for $39.99 per month, including unlimited calls anywhere within the U.S. and Canada. Your phone number can be located in any of a long list of cities: you can live in Granby but have a “local” number in California or New York. If you’re traveling, you can take the converter box with you and plug it in to any high-speed Internet service, and your phone service will be there.

There are limitations. The sound quality may not always be as good as a “real” phone line, especially if you’re doing many other things with your Internet connection. If your ‘net connection goes down, your phone won’t work. Because your Internet connection and the converter need IP Telephony services don’t work with 911 calls, or don’t provide 911 operators with your location.

So far, IP Telephony won’t replace a standard phone line, but it makes a good second line, especially if you make lots of long-distance calls. In the future, as the technology matures, it may replace the “traditional” telephone altogether.

This article was originally published in the June 2003 issue of the Granby Drummer.